In the worst scenario where the Covid-19 epidemic persists until the second quarter and affects subsequent quarters, Hanoi’s GRDP is projected to grow 6.42%, lower than the full-year target of 7.5% or above, according to Nguyen Doan Toan, vice chairman of the Hanoi People’s Committee.

Secretary of the Hanoi Party Committee Vuong Dinh Hue (standing) at the meeting.

Based on preliminary data from the first two months of 2020, Hanoi’s authorities have drafted three growth scenarios. In the first scenario and also the most optimistic one, Hanoi could still achieve growth rate of 7.50% if the epidemic is contained in the first quarter, with a strong rebound in the second quarter and growth acceleration in the third and fourth quarters.

However, in case the epidemic is put under control in the first quarter, but its negative impacts on the economy continue to linger, the GRDP is expected to expand 6.93% this year.

Hanoi remains steadfast on achieving the first scenario, which could be possible through a series of solutions, including stabilizing business sentiment, tighter measures to control the epidemic and pushing for administrative reforms, among others, said Toan at the meeting on March 12.

Tourism continues to be the most affected sector by the epidemic, particularly as China, Japan and South Korea made up 37% of foreign tourists coming to the capital, Toan added.

Industrial production is also among the hardest hit sectors, Toan said, adding exports declined by 15% year-on-year in the January – February period, while Chinese and South Korean markets contributed 40% of total imports.

Additionally, foreign direct investment in Hanoi could soon be affected by the epidemic, as China, South Korea and Japan account for 41.5% of total, added Toan.

According to Toan, Hanoi has identified 55 priority infrastructure development projects in the 2016 – 2020 period with total investment of VND486.99 trillion (US$20.96 billion). As of February, nine projects have been completed, and 15 other projects are set to follow in 2020.

At the meeting, Secretary of the Hanoi Party Committee Vuong Dinh Hue said the city aims for dual target of preventing the spread of the Covid-19 epidemic and maintaining high economic growth this year.

Hue said the top priority at the moment is to contain the epidemic, which could be a key step to create a favorable environment for a speedy resumption of business and production.

A GRDP growth rate of 7.5% in 2020 would help Hanoi achieve an average annual GRDP growth rate of 7.33% - 7.41% in the 2016 – 2020 period, which is in line with the city’s five-year socio-economic development plan.